DraftKings Cuts Profit Outlook, Will Charge Some Bettors an Extra Fee

Shares of DraftKings (DKNG) tumbled Friday aft nan online sports gambling level trim its profit forecast and announced it would put a surcharge connected winnings for bettors successful high-tax states arsenic a measurement to boost earnings.

In a missive to shareholders, nan institution said that respective states, notably Illinois, person put a precocious taxation complaint connected gambling winnings. To reside that, DraftKings said it plans to instrumentality “a gaming taxation surcharge connected a customer’s Net Winnings successful immoderate authorities pinch a taxation complaint supra 20% that has aggregate sports betting operators.”

The institution said that nan surcharge “would beryllium reasonably minimal" to nan customers, and that “additional upside imaginable exists for DraftKings' adjusted earnings earlier interest, taxes, depreciation, and amortization (EBITDA) successful 2025 and beyond" from nan caller fee.

The news came arsenic nan institution reported beardown second-quarter results and a caller $1 cardinal stock buyback plan. Adjusted net per stock came successful astatine $0.22, and gross jumped 36.2% to $1.10 billion. Both exceeded forecasts. 

DraftKings said nan gains came chiefly from respective sources, including nan summation of caller customers and jurisdictions, and nan effect of nan acquisition of nan Jackpocket lottery app.

DraftKings raised its full-year gross outlook to $5.05 cardinal to $5.25 cardinal from nan earlier estimate of $4.80 cardinal to $5.00 billion. However, it reduced its adjusted EBITDA guidance from $460 cardinal to $540 cardinal to $340 cardinal to $420 million.

DraftKing shares fell astir 10% connected Friday, pushing nan banal into antagonistic territory for nan year.